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Cases

Key Staff Departing to a Competitor With Trade Secrets and Client Relationships — Recovering the Full Amount Claimed Through Mediation

Background

Evidence emerged that key members of a regional sales team at our client, a company with a nationwide sales network, had resolved while still employed to move to a competitor, and had taken business records in advance and moved major client accounts to the competitor as well. Changchun represented the company (the plaintiff) in claims for damages and destruction of the misappropriated records.

The Issue — Proving Misappropriation of Trade Secrets and Business Assets and Breach of Non-Competition

The key was to support with evidence ① whether the records taken constituted protectable trade secrets or major business assets, and ② whether preparing to move to a competitor while still employed and soliciting clients was a tort contrary to the employment contract and the principle of good faith.

How Changchun Helped

Changchun (attorney Donghwan Shin) organized the circumstances of the departures, the removal of records and the solicitation of clients, calculated the loss attributable to each employee, and framed the claim for damages together with a claim for destruction of the records. In the course of the litigation, the other side was left in a position where liability was difficult to contest.

Outcome

The matter concluded in mediation on terms favorable to our client, with the other side agreeing to pay the full amount claimed. Our client achieved substantive recovery without a protracted trial.


The collective departure of key staff, taking clients and records with them, can be devastating for a company. Securing evidence of the misappropriation quickly can deliver not only recovery of the loss but destruction of the records and an amicable settlement. (Outcomes may differ depending on the facts of each matter.)

Case articles are anonymized within the scope of client consent and are provided for general information only, not as legal advice on any specific matter. Outcomes may differ depending on the facts of each case.